Iberdrola has placed a green bond issuance with proceeds earmarked to refinance onshore wind farms in the United Kingdom.
Maturity of the €700 million (US$786 million) notes is nine years, ending September 2025. Differential rate came at 32 basis points over mid-swap, with a coupon payment of 0.375%, the lowest obtained by the company in euro-denominated debt transactions.
The issuance price was very competitive in an environment of low interest rates and debt costs, increased investor appetite for green fixed securities and the ECB debt bying programme. In addition, final cost stood at 35 bp below the price of Spanish Treasury bonds for the same maturity.
The bond was twice oversubscribed amid high investor demand driven by socially responsible investors (SRI). In fact over 50% of the placement was subscribed by this type of investors, thereby enabling Iberdrola to diversify its investor base at costs similar to those of a traditional bond.
One of the main features of green bonds is that the funds obtained are used to finance sustainable and socially responsible projects under the certification of an independent validating agency, Vigeo Eiris.
Vigeo Eiris was founded in 2002 and have established themselves as Europe's leading experts in assessing practices and behaviours of companies and public corporations in the areas of environment, social responsibility and good governance.
Today's issuance is the third green bond placement by Iberdrola, enhancing its green bond profile and building up on the success attained in April 2014 when it became the first Spanish company to enter the green bond market, as well as in April 2016.